CPPA made independent to settle electricity dues between buyers and sellers

ISLAMABAD, Apr 22 (INP): In a major bid to bring transparency, promote corporate culture and keep check on circular debt, the Ministry of Water and Power Wednesday separated the Central Power Purchasing Agency (CPPA) from National Transmission and Dispatch Company (NTDC) as an independent company (Guarantee).

The decision was made in a meeting of the Board of Directors of the newly formed entity CPPA(G), held under the chairmanship of Secretary Ministry of Water and Power, Mr. Mohummad Younus Dagha, which approved the implementation of this major reform of the power sector.

The CPPA (G) will be an independent company and shall be performing the function of settlement of dues of electricity between buyers and sellers. It is international best practice and imperative to separate the functions and business of settlement and development of competitive power market structure from the generation, transmission and distribution system. The move is a major reform to achieve efficiency through transparent settlement of power sector dues and build industry standards to manage the power sector business.

The Board of Directors of the CPPA (G) is composed of representatives from Open Market, Generation Companies, Distribution Companies, Finance and Water and Power.

The first Board meeting today resolved to achieve the task and appoint motivated and high caliber technical experts for the company as Chief Executive Officer, Chief Finance Officer, Chief Legal Officer and Company Secretary after fulfilling the prescribed criteria and in strict compliance with guidelines.

It may be noted that the separation of CPPA (G) from NTDC is a major development move by the government. It may be also noted that this is part of multipronged strategy to bring in viable reforms in the Power Sector.